What is the mean test in the Chapter 7 bankruptcy case?
Bankruptcy courts in the United States saw nearly 480,000 Chapter 7 cases in 2018 alone. This compares to less than 300,000 Chapter 11 and Chapter 13 cases combined. While Chapter 7 is the most popular type of bankruptcy, not everyone qualifies for it based on their income and earnings history.
The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 creates new eligibility requirements for Chapter 7 bankruptcy once you pass the “ability test”. The test tool is intended to prevent consumers with too much income from filing for Chapter 7 bankruptcy. Lawmakers assume that if you have the income to make your debt payments, you should file for Chapter 13 reorganization bankruptcy (which requires a payment plan) instead of receiving a discharge from Chapter 7 (which requires no charge).
Oklahoma Bankruptcy Means 2022 Income Test and Limit
You are considering filing for bankruptcy in Oklahoma and understand that you can qualify by passing the Chapter 7 means test. You can be eligible for Chapter 7 bankruptcy in Oklahoma in two different ways, so the purpose of this article is to share how to pass the average test. for Chapter 7.
Your current household income is lower than the average income for your family in Oklahoma. Estimated qualification using Oklahoma means test. Please note some earnings are excluded from the intermediate test. Your current household income is higher than the average, but you have deductible expenses. You can estimate with Oklahoma’s above-average bankruptcy mean test.
Chapter 7 Means Test Explanation
According to the United States Trustee’s office, a means test is a standard bankruptcy form you complete to file for bankruptcy. You can think of it as an income test. The bankruptcy form calculates your average monthly income. It then generates annual figures to calculate your average yearly payment.
Here are some important things to note about the bankruptcy facility test:
The test means in Oklahoma, apply to your entire household income even if your spouse does not file with you. This may be different if you are legally separated.
Household income is used to test bankruptcy facilities in Oklahoma. It compares your median household income with other household incomes in Oklahoma.
How does the test work
Test how to measure your income against the median income in your state. The Department of Justice reports the median income for different household sizes in each state. Your income should not exceed the amount reported for the number of people in your household. First, our attorneys will review all of your sources of income, including at least the following:
- Salaries, bonuses, commissions, tips and overtime.
- self-employed income
- Dividends, interest and royalties.
- Rental income (net)
- Pension and retirement income
- Child or spouse support
- spouse income
- unemployment benefits
- Annuity payments
- State disability insurance
An important note for 2020 is that receiving a CARES Act stimulus check due to the COVID-19 economic crisis will not count as income for aptitude tests. If your earnings are irregular due to one-time commissions or bonuses, you may need to use the average of your payments over the last six months.
Once all your income is added up, if it’s less than the median income for your state, you can file for Chapter 7 bankruptcy. This doesn’t mean you’re disqualified if it’s above the median, but we’ll have to do some additional calculations. The next step is to determine your average spend, which may include the following:
- Tax
- Husband or child support.
- Premium insurance
- Child care fee
- Necessities
- Food and clothes
- Tuition fees for children (except private school fees)
- Mortgage Payment
- Car loan payment
After subtracting this expense from your income, you will measure that amount against the average revenue the Department of Justice reported. If your disposable net income is less than the median, you may be able to file a Chapter 7 case.
Consult a Tulsa bankruptcy attorney today
Passing an aptitude test is essential if you wish to apply under Chapter 7. However, many people make mistakes on their paperwork that can deter them from a Chapter 7 case. This can be a complex process at an already stressful time and requires the assistance of a lawyer—Tulsa bankruptcy. Contact us today.
